I've been hearing more rumbling about this....

[Big Muddy]

The Bakken oil fields have been in the news again, lately....a while back, a bunch of mass emails were sent out about this, but I dismissed most of it, as bullsheeit.


The formation "supposedly" has:

8 times as much oil as Saudi Arabia

18 times as much oil as Iraq

21 times as much oil as Kuwait

22 times as much oil as Iran

500 times as much oil as Yemen


I don't believe most of the bullsheeit emails I get, so I looked up the USGS site, and this is what they say about it:

http://www.usgs.gov/newsroom/article.asp?ID=1911

Looks like we could be energy-independent, if "somebody" got off their azz....jmho.

[Big Skyz]

We have the oil, the problem is a lack of refineries...and an idiotic government.

[Big Muddy]

I would venture a guess that the "idiotic gov't" is the reason for the lack of refineries.

[Big Skyz]

Directly related along with over zealous environmental groups that would rather we be dependant and starve to death, rather than build more refineries.

[BarryBobPosthole]

I thijnk we have our quota of refineries here in Oklahoma. So y'all need to go build one at Yosemite or something. Some other state can pony up.
BKB

[Penguin]

I have studied the energy issue up and down over the past few years. The simple fact is that just because the oil is there doesn't mean it can be got out profitably... or at all. There is a whole new nomenclature to oil and energy issues. Technically recoverable, proven resources, etc all have some nuances that can be glossed over.

Fracking seems to be the flavor du jour these days. Everyone in the media seems to want us to believe it will provide for US energy independence. I am far from convinced. In the end it provides ~some~ extra oil but at a much higher price. It is cost intensive and takes a lot more work to get out which is why domestic oil prices have not went down as production has increased. There is no conspiracy to keep oil prices high. This is the price point necessary to produce oil in this day and time. The easy oil is gone. Over the next few decades you will see prices go higher and higher as we work our way through different technologies being brought online to produce oil that is harder to get out and process.

But if there is one thing I have learned about energy issues it is this: Folks will believe what they wish to believe.

Will

[Big Muddy]

So, why were 4,000 new wells drilled in that area, last year???....just wondering.

[Thumper]

I followed the controversy for a while when all this back & forth crap started. I came to the same conclusion as the Penguin. I'm not real big on conspiracy theories. It costs big money to get that crap from the shale to the pump. It ain't gonna come at a lower price.

[Penguin]

Not sure what you mean. My answer to that is they were drilled because they can make money drilling them when oil is $90 to $100 per barrel as things stand now. As time goes by the technology will become a bit less expensive. But at the same time we will be draining the easiest and most profitable fracked/horizontal wells. After we work our way through the oil that we can get at this price point (which is anyone's guess as to how long that will take, mine is around 2020 we'll be getting there) then we'll move on to those harder to get places. And we'll see price jump again.

Rinse and repeat. Call it Peak Cheap Oil, Peak Oil Dynamic, or whatever. This is how it works. We're on schedule.

Will

[BarryBobPosthole]

Its good for North Dakota either way you want to look at it. and I'm glad for that. Maybe I'll get to go walleye fishing some day there.

BKB

[Buckrub]

USA has not built a refinery since 1976, not because of the government, but solely because of the attitude Posthole displays. Every single potential site has demanded "NIMBY". So none.

We love gasoline.

We hate oil.

[Bwana]

According to the folks in the know there is plenty of oil to be had from these shale formations but as has been said it take a different technology to get it out, i.e. fracking. That being said though more expensive it still pays at prices around the $50 or less mark and maybe even as low as the mid-$30 range.

I agree that we need more refineries and pipelines to see a big change in the price of fuel but you can't tell me all this oil shouldn't be making the cost of gas, etc. go lower. After all, a few short years ago our little state was WAY down the ladder on production but now we rank #2 among the states in oil production with only Texas producing more oil.

Though I am sure it won't make much of a difference I do believe there is a refinery planned in the state but I seem to recall it will only produce, or maybe sell, diesel fuel.

[Penguin]

Bwana that is something that really takes some digging. The industry is not prone to giving clean, up front answers on things like exploration costs and land deals and recovery prospects etc.

But I have heard those same numbers tossed around as well, with one caveat: those prices are for wells in place now.

Once the stuff is in place or at least the horizontal drilling and fracking is done the costs naturally plummet. But when you are talking about going into a new area and doing the up front research to find the best spot and then actually construct the well the price changes quite a bit. And to make it even harder to get to get insight the whole industry has had to reassess what these long term costs are because the lifespan of these wells turned out to be quite a bit shorter than a normal well and their up front production numbers are a good bit higher.

The numbers I have heard that include the "all in" costs run from $60 to $90 per barrel. Whether this is totally accurate is a matter of speculation. I don't claim to know for sure but I lean towards this range of the spectrum. And I always keep in mind that these guys are pretty shrewd. They know how to get out oil. You can bet your bottom dollar that they are going after the easiest to recover, highest quality oil they know of. Technology and know-how is increasing as we speak. They are getting more efficient and better able to do all of this EOR. But at the same time they are exhausting the easy to get stuff, it will only get tougher from here on out. It is a race between technology and resource scarcity.

That is probably what separates me from a true "Peak Oil" advocate. Those folks missed entirely the fact that a higher price would enable a higher level of engineering and technology to be brought to bear. At this much higher level an increase in recoverable oil was realized. How much is a matter of hot debate but the proof is in the pudding, it is coming out of the ground and it wasn't before. Argue if you want but a higher price has enabled new oil to be gotten. And the next price jump will enable another bunch to be gotten. And so on.

OTOH the folks who completely dismiss the concept of resource scarcity out of ideological loyalty (or whatever) have completely missed the fact that the world has changed. We have an entire landscape and economy that is designed for high quality cheap oil.... that doesn't exist anymore. Everything from where we get out food to where we build our homes to what we do for a living to where the things we purchase are made is based on easy access to cheap oil. That oil is gone and it is never coming back. That is going to require a complete rethink of everything. Everything.

No matter how much we complain or make excuses or get mad or blame someone in DC the problem is going to progress.

Anyone who is truly interested in this will find some real gems out in the web but I caution that a lot of it is ideological. You just have to plow through a lot of stuff that you will disagree with and stuff you don't. Be very wary of resource numbers especially from those who have a vested interest in the status quo. A good place to start would be "EROI", energy return on investment. Once I understood the concept of high versus low quality energy in terms of EROI the pieces started to fall in place for me.

Will